Meta chief executive Mark Zuckerberg believes the wave of layoffs so far in 2024 is largely due to companies seeking a “leaner” workforce in the wake of a pandemic-era hiring boom.
Speaking to the Morning Brew Daily podcast last week, Zuckerberg suggested that many organizations ramped up hiring during the onset of the COVID-19 pandemic in 2020 and continued expanding headcounts during the highs of 2021 - but this has come back to bite many.
“In terms of the layoffs and stuff like that, I actually think that was more due to companies trying to navigate COVID and the pandemic,” he said.
“It was this weird wave, where at first we saw ecommerce go through the roof,” he added. “But it was really hard to predict - is that going to continue? is all this ecommerce just better than physical shopping?
“I think across the economy, a lot of companies overbuilt and then when things went back to pretty close to exactly the way they were before. I think a lot of companies realized they’re not in a good financial place.
“So you have this wave of layoffs that were basically responding to that, but then you also had this generation of companies that knew nothing except growth.”
Discussing layoffs at Meta specifically, Zuckerberg said while the decision to cut staff was difficult, it has delivered significant benefits with regard to revenue and cultivating a workforce that is now leaner and more agile.
Meta cut thousands of staff between November 2022 and May 2023 during four separate rounds of layoffs. A key factor in the decision to reduce the firm’s headcount was due to economic uncertainty, the tech giant said at the time.
The firm’s metaverse unit, in particular, was hit hard by the layoffs.
AI hasn’t had an impact on layoffs - at least not for Meta
Discover how organizations are succeeding by proactively adopting AI
The question of whether artificial intelligence has been a contributing factor in the recent wave of layoffs has been a recurring question in recent weeks.
A host of firms, including SAP and Cisco, have announced layoffs amid a sharpened focus on generative AI development.
SAP, in particular, revealed that its job cuts would be due to the automation of certain roles. The German software giant isn’t the first to point toward AI and automation as a factor behind cuts over the last year.
SAP treads a fine line with restructuring plans amid generative AI push
BT and IBM both announced workforce reductions due to AI, sparking concerns over a pending wave of AI-fueled layoffs.
In Meta’s case, Zuckerberg suggested the firm hadn’t factored AI into its decision to cut staff, however.
“For us, the AI stuff was not a major driver for that," he said. "It was like first this overbuilding and then this sense of like let's do the best work we can by making a lean company."
2024 has been a year of layoffs so far, and there could be more to come
2024 has been a challenging year so far for workers across the global technology sector, with cuts affecting thousands. While not quite on the scale of 2023 layoffs, the scale of cuts has still cut deep for many.
Figures from Layoffs.fyi show more than 39,000 staff have been cut across January and February so far - and more could be expected as the year continues.
In January, Google CEO Sundar Pichai warned staff at the tech giant to expect more job losses amid a similar focus on streamlining operations and reducing headcount.
